So, I’ve been messing around with this idea of percentages, specifically the 24/28 rule. It’s something I heard about related to, like, how much of your income should go to housing. I wanted to see how it actually works in practice, so I decided to dig into my own numbers.
Diving into the Numbers
First, I grabbed all my income statements for the last few months. Pay stubs, freelance invoices, everything. I needed to figure out my gross monthly income – that’s the total before any taxes or anything are taken out.
Next, I listed out all my potential housing costs. This is where it got a little tricky. For the 24% rule, it was just my basic rent. It’s important to note my rent includes some utilities, I don’t know how to split them so I just put the one number.
- Rent: My base monthly payment.
The 28% rule, on the other hand, took, well, a bit more work to calculate. I had to think about:
- Rent: Same as above.
- Utilities:What I approximately pay the company.
- HOA Fees:Luckily I don’t have this trouble.
Calculating the Percentages
Okay, time for some math. For the 24% rule, I took my gross monthly income and multiplied it by 0.24. That gave me the maximum amount I “should” be spending on rent, according to this guideline.
I did the same thing for the 28% rule, multiplying my gross income by 0.28. This number was, obviously, a bit higher, reflecting the inclusion of those extra housing-related costs.
The Reality Check
Now for the fun part – comparing these “ideal” numbers to my actual spending. I looked at my bank statements and added up what I was really paying for rent and all those other housing costs. I analyzed my spending by comparing it to the result number of the 24% rule and 28% rule.
I realize this is just a general guideline, but it was a useful exercise to see where I * also helps you understand your income and expenses better.